Harry Markowitz, one of the original founders of modern portfolio theory, recently explored in a simple yet elegant paper how the capital asset pricing model (CAPM) crumbles in the real world (Markowitz, 2006). A striking consequence of this paper, which he does not mention but is relevant for investors today, is that the increasing availability [...]

By Kathleen M. Howley June 20 (Bloomberg) — The worst is yet to come for the U.S. housing market. One hell of a depressing article on the residential housing market can be read here 

Albert Edwards, Dresdner Kleinwort’s well-known global equity strategist, declares: “This is the big one.” Describing the interest rates set by the bond market as the “cornerstone” for valuing equities and other securities, he cautions that if the bond market has truly entered a new era of steadily rising long-term rates, “all investment portfolios will be [...]